Regional trade and growth in Asia and Latin America: the importance of productive complementarity

Abstract

Latin America faces a peculiar situation. Its rich endowment in natural resources has provided substantitive gains stemming from recent boom in the international prices of most commodities. Forecasts for the coming decades are convergent in this favorable situation and are likely to remain, thanks to the perspectives of demand, mainly by Asian emerging economies. At the same time, Latin American producers face an increasing competition of Asian products. This document argues that the recent Asian experience with integrated productive structures presents Latin America with both a challenge and an example to be considered, given the indications that regional trade in producer goods contribute to a more homogeneous GDP growth. Joint efforts to face Asian competition might provide an economic rationale for regional Latin American trade.